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Summary:

It’s a wonder they pulled this off. An obscure agency and a number of its former officials are about to get rich by selling new internet nam…

Money Bags
photo: Corbis / Don Mason

It’s a wonder they pulled this off. An obscure agency and a number of its former officials are about to get rich by selling new internet names that few want or need.

That’s because today is the day that ICANN, the agency that administers Internet naming conventions, begins selling new ‘generic domain names’ for $185,000 a pop. That means new so-called generic TLD’s like “.donut” or “.sillyidea” (for example) are for now for sale.

Is this a good idea?

The folks at ICANN did a good job this week at seeding the press with “ain’t that swell” stories about a “land grab” in domain names that will create a wealth of new commerce. But meanwhile a coalition of major companies have been screaming to stop the process, and the FTC has been warning it will lead to a new wave of cyber-scams.

As we’ve reported in the past, companies are already fed up with fighting off cyber-squatters from the dozen or so existing top level domains, many of which are little-used (.biz, .jobs., .asia anyone?). The most recent example was the “.xxx” domain that brought titters to headline writers but was little more than a tax to the companies who had to buy it to ensure no one else did first. Lawyers I’ve spoken with regularly use the word “extortion” to describe the process.

The new gambit is the worst yet. Not only do companies have to shell out $185,000 to buy the name in the first place but they have to hand over large maintenance payments over a ten year period. They also have to become responsible for running a registry which is beyond the IT capacity of large companies.

Conveniently, technical and consultancy businesses are springing up to help — many of them run by former ICANN members.

Lest anyone doubt this is all about the cash, see the budget breakdown in a previous paidContent article. The article
describes a report by ICANN itself that states the agency hopes to double its revenues. And, in an indication that ICANN has an idea just how unpopular this will be, it plans to set aside about half of its windfall for a legal war chest.

This process is as if the FCC, on its own initiative, decided to sell new radio spectrum that might interfere with existing stations, and then turned around and suggested that broadcasters buy the new spectrum as part of a “land grab” — while also recommending former FCC employees as consultants. The ICANN episode is especially ironic because it happened on the watch of a Republican Congress who ordinarily goes ballistic if any agency exceeds its mandate by so much as an extra paper clip.

ICANN has attempted to rebuff its critics but its arguments so far are not convincing. It has pointed out that there has been support domains like “.music” and “.london” Well, fine. Sell those two domains and, if there is obvious support for other specific domains, sell those too. ICANN also says the system will allow companies in other companies to buy non-Latin domain names. Again, well fine. Create a handful of TLD’s in other languages.

The press is finally starting to catch on what is happening. A Wired editor offered a blistering account of ICANN this morning while the influential All Things D fingered the dollars at the heart of the scheme.

But it’s probably too late by now. The retired ICANN directors are likely clinking glasses this very moment, congratulating themselves for pulling this off. Yee-ha, boys, enjoy your cash grab.

  1. $185,000 seems like a totally reasonable price for owning a period followed by a word. Just make some coffee at home instead of buying Starbucks for a couple months.

    Erik
    http://www.ShelkyBytes.com

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  2. Actually, it’s like the FCC permitting the number of radio stations to go from 30 in a town to 200,000. If you believe you can buy them all, you’re wrong. The right approach is to accept that domain real estate is no longer scarce.

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  3. Anonymous Call To Action Friday, January 13, 2012

    Of all the things that happen anonymously on the net
    to disrupt the corrupt and unscrupulous, why couldn’t something anonymous
    happen to ICANN?

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